Shares of Snap Inc. fell 25% on Thursday after Snapchat, owner of photo messaging app Snapchat, said privacy changes implemented by Apple Inc. on iOS devices hurt the company’s ability to target and measure digital advertising.
Santa Monica, a California-based company that makes the bulk of its revenue from selling digital ads on the app, said the issue was compounded by global supply chain disruptions and labor shortages and caused brands to pull back on their ad spend. .
Results from Snap, which is the first of the major social media companies to report earnings, cast a shadow over Facebook Inc. and Twitter Inc., which release third-quarter results next week.
Snap’s results also sent Facebook shares down 6%, Twitter 7% and Alphabet down 3% on Thursday.
Apple privacy updates were widely rolled out in June and prevent digital advertisers from tracking iPhone users without their consent.
Snap’s chief executive Evan Spiegel said during a conference call with analysts that a new ad measurement tool provided by Apple hindered the ability for companies to measure the performance of their ads, leaving advertisers with business for decades. There are many ways to become addicted.
“It has certainly been a disappointing setback for us,” he said.
Snap said it expects changes to Apple privacy and disruptions to the global supply chain during the fourth quarter, which is typically the highest-grossing period for social media companies when brands are in marketing for the holiday season. accelerate.
Many of the advertisers who advertise on Snapchat are in the beauty, fashion and consumer goods industries.
Snap said the supply chain disruptions affected a variety of advertisers across industries and sectors.
Revenue for the third quarter ended September 30 was $1.07 billion, according to Refinitiv’s IBES data, which did not meet the consensus estimate of $1.1 billion.
Daily active users, a metric closely watched by advertisers and investors, rose 23% year-over-year to 306 million, beating analyst estimates of 301.9 million.
Snapchat has worked to attract and retain users by building out new features, such as the ability to find restaurants and stores via the Maps feature, or play virtual games with friends.
Net loss during the quarter was $72 million, or 5 cents per share, down from $199.9 million, or 14 cents per share, in the year-ago quarter.
Snap forecast fourth-quarter revenue between $1.16 billion and $1.2 billion and daily active users between 316 million and 318 million.
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